Ended 2018 with $68.2 million of cash and cash equivalents and $7.2 million of restricted cash; Torstar has no bank indebtedness. Cash provided by operating activities was $29.2 million in the fourth quarter of 2018, reflecting $22.4 million of cash generated by operating activities and a $6.3 million decrease in non-cash working capital.

Earlier in the year, we introduced single sign-on (user registration) on thestar.com and in the fourth quarter, we launched this across all our news sites within the Community Brands segment to add value to our audiences through the enhanced collection and use of data.

Late in the third quarter we launched paid digital subscription offerings on thestar.com and finished the year with almost 10,000 digital only subscribers.

In the fourth quarter of 2018, we began testing subscription offerings in three select pilot markets within our Community Brands segment.

On October 1, 2018 , we acquired the assets of iPolitics, a digital subscription based political news outlet based in Ottawa that provides extensive digital online coverage of federal and provincial politics. The purchase of iPolitics complements the political coverage by the Toronto Star's Ottawa and Queen's Park bureaus and contributes selected content as part of our basic digital subscription offering on thestar.com.

Our net loss from continuing operations was $3.3 million ( $0.04 per share) in the fourth quarter of 2018. This compares to net income of $7.8 million ( $0.10 per share) in the fourth quarter of 2017.

Adjusted earnings per share (see "Non-IFRS measures") was $0.15 in the fourth quarter of 2018 compared to adjusted earnings per share of $0.32 in the comparable period in 2017.

Our segmented adjusted EBITDA (see "Non-IFRS measures") was $29.8 million in the fourth quarter of 2018, a decline of $13.2 million from the fourth quarter of 2017 and included the benefit of $7.8 million of digital media tax credits (fourth quarter of 2017 - $13.4 million ). Excluding the impact of the digital media tax credits, adjusted EBITDA in the fourth quarter of 2018 was down $7.6 million relative to the fourth quarter of 2017.

Segmented revenue (see "Non-IFRS measures") was $163.8 million in the fourth quarter of 2018, down $25.7 million (14%) from $189.5 million in fourth quarter of 2017.

Highlights for the year:

We launched a major national expansion with a reinvention of our Metro urban commuter newspapers and more robust digital local offerings on thestar.com in Vancouver , Calgary , Edmonton , Toronto , Halifax and nationally, leveraging the Star brand and its history and unique position of local and investigative reporting.

On September 27, 2018 , we received approval from the members of our eight registered defined benefit pension plans (the "Torstar Plans") to proceed with the merger of the Torstar Plans with the Colleges of Applied Arts & Technology Pension Plan (the "CAAT Plan") effective October 1, 2018 , with Torstar and certain of its subsidiaries becoming participating employers under the CAAT Plan. The merger remains subject to the consent of the Superintendent of Financial Services ( Ontario ), which is not expected to occur prior to the second half of 2019.

In 2018 we sold our portfolio investment in Kanetix Ltd. for cash proceeds of $5.7 million and recorded a gain before tax of $2.7 million in other comprehensive income. On April 12, 2018 , Workopolis.com and Workopolis' related assets were sold to Recruit Holdings Co., Ltd. Following the sale and subsequent wind up of the remaining Workopolis business, we estimate that net proceeds will be in the range of $4.0 million , $3.8 million of which has been received to date.

Cash provided by operating activities was $14.4 million in 2018 reflecting $21.4 million of cash generated by operating activities partially offset by an $8.8 million increase in working capital.

Our net loss from continuing operations was $38.0 million ( $0.47 per share) in 2018 compared to $30.6 million ( $0.38 per share) in 2017. Our net loss in 2018 included $66.7 million of non-cash amortization and depreciation, $38.9 million of which related to our investment in VerticalScope, and $8.0 million of non-cash impairment charges. Our net loss in 2017 included $66.9 million of non-cash amortization and depreciation and $11.1 million of non-cash impairment charges.

Adjusted loss per share (see "Non-IFRS measures") was $0.11 in 2018 compared to adjusted earnings per share of $0.01 in 2017. Adjusted loss per share included an $0.82 per share effect of amortization and depreciation.

Our segmented adjusted EBITDA (see "Non-IFRS measures") was $60.8 million in 2018, down $13.4 million relative to the prior year and included the benefit of $23.9 million of digital media tax credits (2017 - $13.4 million ). Excluding the tax credits, adjusted EBITDA was $36.9 million in 2018, down $23.9 million relative to 2017.

Segmented revenue (see "Non-IFRS measures") was $615.0 million in 2018, down $76.6 million (11%) from $691.6 million in 2017.

"While results in the quarter continued to reflect ongoing challenges in the print advertising market, we were pleased with a number of important developments in our transformation efforts. Having launched digital subscriptions at the Star at the end of the third quarter, we ended the year with almost 10,000 paid digital-only subscriptions. We introduced user registration across all our Community news sites as part of our broader data strategy in order to add value to our audiences and advertisers. We began testing a subscription offering in three select pilot markets within our Community Brands. After a year of hard work required to lay the foundation to support key advances in digital subscriptions and digital advertising capabilities, we are now beginning to see initiatives roll out in the market" said John Boynton , President and CEO of Torstar. "Segmented adjusted EBITDA, excluding digital media tax credits, of $22.0 million , was down $7.6 million as print advertising revenue trends continued to be more difficult in the quarter compared to our experience earlier in the year. On a positive note, our subscriber revenue, which is a large and more resilient part of our business, continued to be stable and flyer distribution declines were comparatively modest. In the fourth quarter we also benefitted from $7.8 million of digital media tax credits as well as continued efforts on costs which helped to offset continued pressure on print advertising revenues. Earnings in the quarter included $7.2 million from VerticalScope where the revenue growth trend showed some improvement."

"Looking forward, we begin the year from a solid financial position, having finished 2018 with $68.2 million in unrestricted cash and no bank debt. In 2019, we expect earnings to benefit from moderate growth at VerticalScope, continued relative stability in subscriber revenues and ongoing efforts to reduce costs which we anticipate will help to mitigate continued pressures on print advertising revenues. We also expect that progress in our transformation efforts will help to drive stronger digital advertising revenue growth and a new modest but growing digital subscription revenue stream."

The following chart provides a continuity of earnings per share from the fourth quarter and twelve months ended December 31, 2017 to the fourth quarter and twelve months ended December 31, 2018 :

Fourth quarter

Year ended December 31

Earnings (Loss) Per Share

Adjusted Earnings (Loss) Per Share **

Earnings (Loss) Per Share

Adjusted Earnings (Loss) Per Share **

Earnings (loss) per share from continuing operations attributable to equity shareholders in 2017

$0.10

$0.32

($0.38)

$0.01

Changes

•

Adjusted EBITDA*

(0.16)

(0.16)

(0.17)

(0.17)

Operating earnings (loss)*

(0.06)

0.16

(0.55)

(0.16)

•

Restructuring and other charges*

(0.01)

(0.02)

•

Impairment of assets*

0.04

Operating profit (loss) *

(0.07)

0.16

(0.53)

(0.16)

•

Interest and financing costs

0.02

0.02

0.01

0.01

•

Non-cash foreign exchange

(0.02)

•

Income (loss) from associated businesses (excluding VerticalScope)

0.04

0.04

0.05

0.05

•

Other income

(0.05)

(0.04)

•

Other

0.02

(0.07)

0.06

(0.01)

Earnings (loss) per share from continuing operations attributable to equity shareholders in 2018

($0.04)

$0.15

($0.47)

($0.11)

Earnings per share from discontinued operations attributable to equity shareholders in 2018

** These are non-IFRS or additional IFRS measures, see "Non-IFRS measures".

RevenueIn November 2017 , we completed a transaction with Postmedia Network Inc. ("Postmedia"), in which we purchased and sold a number of daily and community newspapers. As part of the transaction, we acquired eight weekly community publications, seven paid daily newspapers and two free daily newspapers from Postmedia. In addition, we sold 22 weekly community newspapers in eastern and southern Ontario and the Metro Winnipeg and Metro Ottawa free daily publications to Postmedia. Readers and advertisers of certain publications we acquired and subsequently closed are now being serviced by one or more of our other Community properties while we continue to operate four daily newspapers acquired from Postmedia now included in our Daily Brands segment. Refer to Section 16 of the MD&A for the year ended December 31, 2018 for further discussion. As a result of the sale of a number of our weekly community newspapers and our purchase of additional daily newspaper publications in November 2017 , revenues in the Community Brands segment were $4.3 million lower in the fourth quarter of 2018, while revenues in the Daily Brands segment increased by $1.5 million in the fourth quarter of 2018. Revenues in the fourth quarter of 2018 were also impacted by the sale of Workopolis in April 2018 and wagjag.com in October 2017 .

In addition, as a result of a variation in the quarterly publishing calendar in 2018 relative to last year, our first quarter 2018 revenue benefited from additional publishing days in both the Daily Brands and Community Brands Segments. This variance in the publishing calendar reversed in the fourth quarter of 2018 when there were fewer publishing days relative to the fourth quarter of 2017. The impact of these shifts in the calendar in the fourth quarter of 2018 was net lower revenue of $3.6 million (Community Brands - $2.5 million , Daily Brands - $1.1 million ). The impact on adjusted EBITDA as a result of these shifts was minimal.

When we refer to "same store basis" in this section of the press release, the comparisons have been adjusted to exclude the purchased and sold properties as well as the differences related to timing of the publishing calendar.

Segmented revenue was down $25.7 million or 14% in the fourth quarter of 2018 and included revenue growth of $1.6 million or 13% from VerticalScope (9% in U.S. dollars).

Operating revenue (excluding our proportionate share of revenues from our joint ventures and our 56% interest in VerticalScope) was down $24.5 million or 14% in the fourth quarter of 2018.

On a same store basis in the fourth quarter of 2018, subscriber revenues increased 1%, print advertising revenues were down 19% and flyer distribution revenues were down 5% respectively from the fourth quarter of 2017.

On a same store basis, digital revenue across all segments increased 2% in the fourth quarter of 2018, reflecting continued solid growth in local digital advertising within the community news sites and growth in other digital revenue streams at the Star as well as growth at VerticalScope partially offset by declines in other digital properties. Digital revenues were 21% of total segment revenues in the fourth quarter of 2018 compared to 19% in the fourth quarter of 2017.

Salaries and benefitsOur segmented salaries and benefits costs in the fourth quarter of 2018 were comparable to the fourth quarter of 2017 and included the benefit of $7.8 million of digital media tax credits compared to $13.4 million in 2017. These tax credits represent recoveries of previously incurred salary and benefits costs related to claims made in respect of prior year operations. Excluding the impact of these tax credits, segmented salaries and benefit costs in the fourth quarter of 2018 were down $5.6 million or 8% in the quarter reflecting $1.1 million of lower costs associated with the Postmedia transaction as well as the benefit of savings from restructuring initiatives. These reductions were partially offset by the impact of higher minimum wage in Ontario and additional staffing related to our transformation activities.

Other operating costsSegmented other operating costs primarily consist of circulation and flyer distribution costs, newsprint costs and other production costs which represented 43%, 12% and 15% respectively of segmented other operating costs in the fourth quarter of 2018. Segmented other operating costs were down $12.5 million or 14% in the fourth quarter of 2018 largely as a result $2.4 million of lower costs associated with the sale of publications to Postmedia as well as lower print volumes and the impact of other cost reductions, in part associated with an increased focus on print subscriber profitability, partially offset by additional costs related to our transformation activities.

Adjusted EBITDAOur segmented adjusted EBITDA was $29.8 million in the fourth quarter of 2018, a decline of $13.2 million from the fourth quarter of 2017 and included the benefit of $7.8 million of digital media tax credits (fourth quarter of 2017 - $13.4 million ). Excluding the impact of the digital media tax credits, adjusted EBITDA in the fourth quarter of 2018 was down $7.6 million relative to the fourth quarter of 2017.

Segmented adjusted EBITDA in the Daily Brands segment was $12.0 million in the fourth quarter of 2018 and included the benefit of $7.3 million of digital media tax credits (fourth quarter of 2017 - $13.4 million ). Excluding the impact of the digital media tax credits, adjusted EBITDA in the Daily Brands segment in the fourth quarter of 2018 was down $6.0 million relative to the fourth quarter of 2017. Segmented adjusted EBITDA in the Community Brands segment was $12.8 million , down $1.8 million relative to the comparable period in 2017 and included the benefit of $0.5 million of digital media tax credits. Segmented adjusted EBITDA in the Digital Ventures segment was $7.6 million , a decrease of $0.1 million relative to the fourth quarter of 2017.

The fourth quarter of 2018 included an incremental $0.8 million in segmented adjusted EBITDA resulting from synergies associated with the Postmedia transaction, as well as $3.8 million of savings related to restructuring initiatives offset by $3.7 million of costs related to our transformation activities.

Operating earningsSegmented operating earnings were $13.9 million in the fourth quarter of 2018, down $12.7 million from operating earnings of $26.6 million in the fourth quarter of 2017 largely due to lower adjusted EBITDA partially offset by lower share based compensation expense.

Restructuring and other chargesTotal segmented restructuring and other charges were $6.4 million in the fourth quarter of 2018 and $6.0 million in the comparable period in 2017. Restructuring initiatives undertaken in the fourth quarter of 2018 are expected to result in annualized net savings of $6.9 million and have resulted in the reduction of approximately 200 positions with $0.1 million of the savings associated with these restructuring initiatives realized in the fourth quarter of 2018.

Impairment of assetsDuring the fourth quarter of 2018, we incurred non-cash impairment charges of $8.0 million in respect of investments in joint ventures (2017 - $8.1 million in respect of goodwill in the Digital Ventures segment). These charges had no impact on cash flows and are discussed further in the discussion of annual operating results in Section 3 of the MD&A.

Operating profit (loss)In the fourth quarter of 2018 our segmented operating loss was $0.5 million compared to operating profit of $12.4 million in the fourth quarter of 2017. Excluding the impact of the digital media tax credits, operating loss in the fourth quarter of 2018 was $8.3 million compared to operating loss of $1.0 million in the fourth quarter of 2017.

Our operating profit, excluding our proportionate share of operating profit from our joint ventures and our investment in VerticalScope, decreased $3.8 million in the fourth quarter of 2018 to $9.8 million .

Income (loss) from joint venturesLoss from joint ventures was $7.9 million in the fourth quarter of 2018 compared to an income of $0.6 million in the fourth quarter of 2017. The loss in the fourth quarter of 2018 included a non-cash impairment charge of $8.0 million related to our joint venture investment in Sing Tao.

Loss from associated businessesLoss from associated businesses was $5.0 million in the fourth quarter of 2018 compared to a loss of $2.0 million in the fourth quarter of 2017. The loss in the fourth quarter of 2018 included income of $1.1 million from Black Press, a loss of $0.8 million from Blue Ant and a loss of $5.1 million from VerticalScope. The loss from VerticalScope in the fourth quarter of 2018 included $8.6 million of amortization expense and $2.3 million of acquisitions related expense resulting from adjustments to contingent considerations and interest accretion costs. The loss in the fourth quarter of 2017 included a loss of $2.9 million from Black Press and a loss of $0.3 million from Blue Ant, partially offset by income of $1.5 million from VerticalScope. Income from VerticalScope in the fourth quarter of 2017 included a $5.0 million gain related to one of their acquisitions as well as $8.1 million of amortization expense.

Other incomeOther income was $nil in the fourth quarter of 2018 and $3.9 million in the fourth quarter of 2017. Other income in the fourth quarter of 2017 included a gain of $3.2 million related to the sale of publications to Postmedia as well as a gain of $0.5 million on the sale of WagJag and related assets.

Income and other taxesWe recorded income tax expense of $nil in the fourth quarter of 2018 and income tax expense of $6.9 million in the fourth quarter of 2017. We have not recognized the benefit of net deferred income tax assets on the consolidated statement of financial position.

Net income (loss) from continuing operationsOur net loss from continuing operations was $3.3 million ( $0.04 per share) in the fourth quarter of 2018. This compares to net income of $7.8 million ( $0.10 per share) in the fourth quarter of 2017.

Income from discontinued operationsIncome from discontinued operations of $0.2 million in the fourth quarter of 2018 and $0.9 million in the fourth quarter of 2017 relate to adjustments made to provisions for indemnities associated with the sale of Harlequin in 2014. These adjustments reflect revised estimates of the amounts of these provisions in respect of taxes, legal and other costs.

OPERATING RESULTS – YEAR ENDED DECEMBER 31, 2018

The following tables set out, in $000's, the segmented results for the years ended December 31, 2018 and 2017.

**These are non-IFRS or additional IFRS measures, see "Non-IFRS measures".

RevenueIn November 2017 , we completed a transaction with Postmedia, in which we purchased and sold a number of daily and community newspapers. As part of the transaction, we acquired eight weekly community publications, seven paid daily newspapers and two free daily newspapers from Postmedia. In addition, we sold 22 weekly community newspapers in eastern and southern Ontario and the Metro Winnipeg and Metro Ottawa free daily publications to Postmedia. Readers and advertisers of certain publications we acquired and subsequently closed are now being serviced by one or more of our other Community properties while we continue to operate four daily newspapers acquired from Postmedia now included in our Daily Brands segment. Refer to Section 16 of the MD&A for further discussion. As a result of publications sold and acquired, revenues in the Community Brands segment were estimated to be $22.4 million lower in 2018, while revenues in the Daily Brands segment were $8.2 million higher in 2018. Revenues in 2018 were also impacted by the sale of Workopolis in April 2018 and wagjag.com in October 2017. When we refer to "same store basis" in this section of the press release, the comparisons have been adjusted to exclude these properties.

Segmented revenue was down $76.6 million or 11% in 2018 and included revenue growth of $5.1 million (11%) from VerticalScope (12% revenue growth in U.S. dollars). On a same store basis, segmented revenue was down $45.8 million (7%) in 2018.

Revenue excluding our proportionate share of revenue from joint ventures and our 56% interest in VerticalScope ("operating revenue") was down $72.3 million or 12%.

On a same store basis, subscriber revenues were down 1%, print advertising revenues were down 18% and flyer distribution revenues' were down 5% respectively from prior year.

On a same store basis, digital revenue across all segments increased 2% in 2018, reflecting continued solid growth in local digital advertising within the community websites and growth in other digital revenue streams at the Star as well as growth at VerticalScope. Digital revenues were 20% of total segment revenues in 2018 compared to 19% in 2017.

The following charts provide a breakdown of total segmented operating revenue for 2018 and 2017 (in $000's):

Year ended December 31, 2018

Communities

Dailies

Digital ventures

Total Segmented

$

%

$

%

$

%

$

%

Print advertising

$99,375

38%

$110,811

38%

$210,186

34%

Digital advertising

26,306

10%

26,796

9%

$66,863

100%

119,965

20%

Flyer distribution

95,531

37%

21,573

7%

117,104

19%

Print and digital subscriber

460

120,138

41%

120,598

20%

Other

36,565

15%

10,613

5%

47,178

7%

Total

$258,237

100%

$289,931

100%

$66,863

100%

$615,031

100%

Year ended December 31, 2017

Communities

Dailies

Digital ventures

Total Segmented

$

%

$

%

$

%

$

%

Print advertising

$125,519

41%

$138,863

44%

$264,382

38%

Digital advertising

30,747

10%

25,495

8%

$72,297

100%

128,539

19%

Flyer distribution

110,883

36%

23,275

7%

134,158

19%

Print and digital subscriber

715

115,818

37%

116,533

17%

Other

37,439

13%

10,549

4%

47,988

7%

Total

$305,303

100%

$314,000

100%

$72,297

100%

$691,600

100%

Salaries and benefitsOur segmented salaries and benefits costs were down $26.2 million or 10% in 2018 and included the benefit of $23.9 million of digital media tax credits (2017 - $13.4 million ) as this represents recoveries of previously incurred salary and benefits costs. Excluding the impact of these tax credits, segmented salaries and benefit costs in 2018 were down $15.7 million or 6% reflecting $6.5 million of lower costs associated with the Postmedia transaction as well as the benefit of savings from restructuring initiatives. These reductions were partially offset by the impact of higher minimum wage in Ontario , additional staffing related to our transformation activities as well as increased salary and benefit costs associated with acquisition related growth at VerticalScope.

Other operating costsSegmented other operating costs primarily consist of circulation/flyer distribution costs, newsprint costs and other production costs which represented 41%, 11% and 14% respectively of segmented other operating costs in 2018. Segmented other operating costs were down $36.9 million or 11% in 2018 largely as a result of $13.9 million of lower costs associated with the sale of publications in 2017 as well as lower print volumes and the impact of other cost reductions, in part associated with an increased focus on print subscriber profitability, partially offset by additional costs related to our transformation activities.

Adjusted EBITDAOur segmented adjusted EBITDA was $60.8 million in 2018, down $13.4 million relative to the prior year and included the benefit of $23.9 million of digital media tax credits (2017 - $13.4 million ). Excluding the benefit of these tax credits, adjusted EBITDA was $36.9 million in 2018, down $23.9 million relative to 2017.

Segmented adjusted EBITDA in the Daily Brands segment was $25.3 million , down $1.1 million relative to 2017 and included the benefit of $23.4 million of digital media tax credit (2017 - $13.4 million ). These tax credits relate to claims made in respect of prior year operations. Segmented adjusted EBITDA in the Community Brands segment was $23.5 million in 2018, down $8.0 million relative to 2017 and included the benefit of a $0.5 million digital media tax credit. Segmented adjusted EBITDA in the Digital Ventures segment was $24.4 million in 2018, a decrease of $2.5 million compared to 2017, $1.2 million of which was the result of the sale of Workopolis in early April 2018 . Corporate costs, including external professional fees, were also $1.9 million higher in 2018 compared to 2017.

Adjusted EBITDA in 2018 included an incremental $6.2 million in segmented adjusted EBITDA resulting from synergies associated with the Postmedia transaction, as well as $18.5 million of savings related to restructuring initiatives offset by $14.6 million of costs related to our transformation activities and higher professional fees.

Our transformation efforts in 2018 have been concentrated on the launch of digital subscriptions on thestar.com and the launch of subscriptions in certain markets in our Community Brands segment, a major national digital expansion, an exclusive deal with the Wall Street Journal, the roll out of user registrations to add value to our audiences through the enhanced collection and use of data, an increased investment in investigative journalism, hyper-local and local content, development of our data infrastructure, advanced analytics capability, customer life cycle management capabilities, and a new technology stack for client and customer facing executions.

Amortization and depreciationTotal segmented amortization and depreciation decreased by $0.2 million in 2018 to $66.7 million as a result of higher amortization related to acquisitions made at VerticalScope in 2018 offset by lower amortization associated with our Daily and Community Brands segments.

Operating earnings (loss)Segmented operating loss was $7.8 million in 2018, compared to segmented operating earnings of $4.8 million in 2017. Operating loss in 2018 included $38.9 million of amortization expense associated with our investment in VerticalScope (2017 - $28.1 million ) and the benefit of $23.9 million of digital media tax credits (2017 - $13.4 million ).

Restructuring and other chargesTotal segmented restructuring and other charges were $20.5 million in 2018, and are expected to result in annualized net savings of $19.9 million . This has resulted in the reduction of approximately 450 positions with $8.7 million of the savings realized in 2018. Total segmented restructuring and other charges of $18.9 million were recorded in 2017, $16.5 million of which related to ongoing efforts to reduce costs while $2.4 million related to restructuring associated with publications we acquired from Postmedia in November 2017 .

Over the last few years we have undertaken several restructuring initiatives in order to reduce our ongoing operating costs. At December 31, 2018 , our liability for payments in respect of these restructuring initiatives was $18.0 million (2017 - $23.6 million ). The following chart provides a year-over-year summary of the realized and expected net savings by year:

Year of Initiative

(in $000's)

2016

2017

2018

Total

Realized net savings in:

2016

$19,900

$19,900

2017

16,600

$12,100

28,700

2018

9,900

$8,700

18,600

Expected net savings in:

2019

11,100

11,100

2020

100

100

Annualized net savings

$36,500

$22,000

$19,900

$78,400

Impairment of assetsDuring 2018, we incurred non-cash charges related to impairment of our investments in joint ventures totalling $8.0 million . During 2017, we incurred charges related to asset impairment of intangible assets and investments in joint ventures totalling $11.1 million . These charges have no impact on cash flows.

During the fourth quarter of 2018, we concluded that there were indicators of impairment for our joint venture investment in Sing Tao Daily resulting from lower forecasted revenues that reflect challenges in the print advertising market. In carrying out the impairment test, we determined that the carrying amount of the joint venture investment in Sing Tao Daily exceeded its value in use ("VIU") and accordingly, we recorded an impairment charge of $8.0 million .

In connection with our impairment test on December 31, 2017 , we determined that the carrying amount of goodwill in the Digital Ventures Cash Generating Unit ("CGU") exceeded its VIU and accordingly, we recorded an impairment charge of $8.1 million in respect of goodwill in the Digital Ventures CGU. Please refer to the discussion of Critical Accounting Policies and Estimates in Section 9 of the MD&A for further discussion. Also, during the first quarter of 2017, we determined that the carrying amount of our joint venture investment in Workopolis exceeded the VIU and we recorded an impairment charge of $3.0 million in respect of this investment as a result of a further downward revision in longer term forecasted revenues reflecting further increased competition in the online recruitment and job search markets.

Operating lossIn 2018, our segmented operating loss was $36.2 million compared to $25.1 million in 2017. Our 2018 segmented operating loss included $66.7 million of non-cash amortization and depreciation, $38.9 million of which related to our investment in VerticalScope, and $8.0 million of non-cash impairment charges. Our 2017 segmented operating loss included $66.9 million of non-cash amortization and depreciation and $11.1 million of non-cash impairment charges.

Loss from joint venturesLoss from joint ventures was $5.4 million in 2018 and $1.8 million in 2017. These losses primarily reflect non-cash impairment charges of $8.0 million recorded in 2018 related to our joint venture investment in Sing Tao and $3.0 million recorded in 2017 related to our joint venture investment in Workopolis, as discussed above. Excluding the impact of the impairment charges, income from joint ventures was $2.6 million in 2018 and $1.2 million in 2017 respectively. The loss from joint ventures in 2018 also included a $3.7 million gain on the sale of Workopolis.com and related assets that were sold on April 12, 2018 as well as $1.8 million of restructuring charges related to the closure of the remaining Workopolis business following the sale.

Loss from associated businessesLoss from associated businesses was $20.4 million in 2018 compared to a loss of $6.8 million in 2017. The loss from associated businesses was heavily influenced by VerticalScope's amortization and depreciation policy related to U.S. $47.8 million of acquisitions completed in 2018 (2017 - U.S. $37.9 million ).

The 2018 loss included income of $2.3 million from Black Press offset by a loss of $0.6 million from Nest Wealth, a loss of $1.3 million from Blue Ant and a loss of $20.7 million from VerticalScope. The 2018 loss from VerticalScope included $38.9 million of amortization and depreciation expense and $2.3 million of acquisitions related expense resulting from adjustments to contingent considerations and interest accretion costs. The 2017 loss included income of $1.4 million from Blue Ant and income of $0.7 million from Nest Wealth offset by a loss of $5.7 million from Black Press and a loss of $3.2 million from VerticalScope. The 2017 loss from VerticalScope included $28.1 million of amortization and depreciation expense and $5.0 million gain related to one of their acquisitions in 2017.

Our share of Black Press' net income was $2.3 million in 2018 (loss of $5.7 million in 2017), representing Black Press' results through November 30, 2018 . Black Press has a February fiscal year end and therefore does not have coterminous quarter-ends with us.

Our share of Blue Ant's net loss was $1.3 million in 2018 (income of $1.4 million in 2017) representing Blue Ant's results through November 30, 2018 which included dilution gains of $0.4 million ( $2.9 million in 2017). Our equity interest in Blue Ant was 16% at the end of 2018 comparable with our equity interest at the end of 2017. Blue Ant has an August fiscal year end and therefore does not have coterminous quarter-ends with us.

We did not record any income or loss during 2018 or 2017 in respect of our investment in Canadian Press as the carrying value had previously been reduced to $nil. We will begin to report our share of Canadian Press' results once the unrecognized losses, including Other Comprehensive Income ("OCI") losses ( $5.9 million as of December 31, 2018) have been offset by net income, OCI or additional investments are made. For the year ended December 31, 2018, we would have reported a net loss of $0.1 million and other comprehensive loss of $0.5 million from Canadian Press (2017 – income of $1.1 million and other comprehensive loss of $1.8 million ).

Investment in VerticalScopeWe own a 56% interest in VerticalScope. During 2018, VerticalScope generated U.S. $19.7 million of cash from operations and made acquisitions totalling U.S. $47.8 million . VerticalScope's debt, net of cash, increased U.S. $31.3 million from U.S. $87.1 million at December 31, 2017 to U.S. $118.4 million at December 31, 2018. In 2017, VerticalScope entered into a new five-year, US $200 million senior credit facility.

In connection with the investment in VerticalScope, during 2018 we recorded $38.9 million of amortization and depreciation expense (2017 - $28.1 million ).

Other incomeOther income was $0.3 million in 2018 compared to $3.9 million in 2017. Other income in 2018 primarily related to a gain on the sale of a real estate property. Other income in 2017 included a gain of $3.2 million related to the sale of publications to Postmedia and a gain of $0.5 million on the sale of WagJag and related assets.

On November 27, 2017 we entered into an asset purchase agreement with Postmedia relating to the purchase and sale of a number of community and daily newspapers. As part of the transaction, we acquired eight weekly community publications, seven daily community newspapers and two free daily newspapers from Postmedia. As consideration for the purchase, we sold 22 weekly community newspapers in eastern and southern Ontario and the Metro Winnipeg and Metro Ottawa free daily publications to Postmedia. The transaction was a non-monetary transaction as there was no cash exchanged. The estimated fair value of both the net assets acquired from Postmedia and the net assets we sold was $3.5 million . We recognized a gain on sale of $3.2 million which represented the difference between the consideration received, being the net assets acquired at fair value, and the carrying value of the net liabilities transferred and cost of disposal.

Income and other taxesWe recorded an income tax recovery of $0.1 million in 2018 and an income tax expense of $5.7 million in 2017. We have not recognized the benefit of net deferred income tax assets on the consolidated statement of financial position.

Net loss from continuing operationsOur net loss from continuing operations was $38.0 million ( $0.47 per share) in 2018, compared to a loss of $30.6 million ( $0.38 per share) in 2017. Our loss in 2018 included $66.7 million of amortization and depreciation expense, $38.9 million of which related to our investment in VerticalScope, and $8.0 million of non-cash impairment charges. Our 2017 net loss included $66.9 million of non-cash amortization and depreciation and $11.1 million of non-cash impairment charges.

Income from discontinued operationsIn connection with the sale of Harlequin in 2014, Torstar indemnified the purchaser for costs and fees related to certain matters including certain tax and pre-existing litigation matters and estimated the exposure under these indemnities and recorded a contingent liability in respect of these matters. The income of $6.5 million in 2018 and $1.4 million in 2017 relate to revised estimates of indemnity provisions related to legal costs, taxes and other costs. Income in 2018 also included an income tax recovery of $6.2 million , primarily related to an adjustment to the income tax expense related to the sale of Harlequin.

Net loss attributable to equity shareholdersOur net loss attributable to equity shareholders was $31.5 million ( $0.39 per share) in 2018 compared to net loss attributable to equity shareholders of $29.2 million ( $0.36 per share) in 2017.

OUTLOOKIn 2018, the Community Brands and the Daily Brands segments continued to face a challenging print advertising market resulting from ongoing shifts in spending by advertisers. While these trends have continued early into 2019, it is difficult to predict if these trends will improve or worsen in the balance of the year. On a same store basis, flyer distribution revenues declined 5% in 2018 and we expect this trend will be slightly worse in 2019. On a same store basis, subscriber revenues declined 1% in 2018, and we expect this trend will deteriorate modestly in 2019 as we continue to increase focus on subscriber profitability. Overall digital advertising revenue growth at the Community Brands and Daily Brands is expected to strengthen in 2019, benefiting from growth in local digital advertising at the community news sites and in digital revenue growth at the Star partially offset by expected continued declines in other digital verticals. In addition, we expect revenue will begin to benefit from a growing digital subscription stream in 2019 as we increase focus on attracting new digital subscribers.

Within the Digital Ventures segment, VerticalScope revenue is expected to show moderate growth on a full year basis with expected softness in the first half of the year more than offset with anticipated growth in the back half of 2019. Results in the year will reflect the impact of prior period acquisitions, an expected gradual stabilization of organic growth challenges and an increased level of investment in their technology platform as well as the benefits of cost savings initiatives and platform consolidation already completed.

We expect the cost base in 2019 to benefit from $11 million of restructuring savings related to restructuring initiatives undertaken to date and we also expect to continue to execute additional cost savings in the balance of the year.

Beginning on January 1, 2019 , we will adopt the new IFRS 16 standard on lease accounting. The adoption of the lease standard will have a positive impact on adjusted EBITDA in respect of rent expense, which will be offset by increased depreciation expense and interest expense. On a comparative basis, we estimate that the impact on the adjusted EBITDA for 2018 for the removal of the rent expense to be approximately $5.4 million (Dailies Segment approximately $1.6 million , Communities segment approximately $3.2 million and Digital Ventures segment approximately $0.6 million ), split evenly over the four quarters. This change will have no impact on cash flow.

From a cash flow perspective, we anticipate that capital expenditures for 2019 will be in the range of $16 - $17 million , including approximately $8 million of capital spending related to technology platforms in connection with our transformation activities. In addition, at December 31, 2018 we had net receivables related to digital media tax credits totaling $20.4 million which have been approved by the Ontario Media Development Corporation ("OMDC"). The amount and timing of any cash realized from these receivables is dependent upon the final review and approval by the Canada Revenue Agency which is expected to be completed in 2019.

On September 27, 2018 , we received approval from the members of the Torstar Plans to proceed with the merger of the Torstar Plans with the CAAT Plan effective October 1, 2018 , with Torstar and certain of its subsidiaries becoming participating employers under the CAAT Plan. The merger remains subject to the consent of the Superintendent of Financial Services ( Ontario ), which is not expected to occur prior to the second half of 2019.

Following the consent of the Superintendent of Financial Services ( Ontario ), the liabilities for all past benefits under the Torstar Plans will be transferred to the CAAT Plan together with the assets of the Torstar Plans, and the CAAT Plan will assume responsibility for all pension benefit payments to members of the Torstar Plans going forward. No additional cash funding related to the transferred liabilities is expected to be required from Torstar in connection with the merger. Effective October 1, 2018 , members of the Torstar Plans began accruing benefits under the new DBplus provisions of the CAAT Plan.

Beginning in January 1, 2019 , most Torstar employees including those previously enrolled in defined contribution type benefit plans began accruing benefits under the CAAT Plan. Pension expense and contributions related to the CAAT plan are based on a fixed percentage of earnings with the expense expected to be approximately $4 million lower in 2019 than our combined 2018 expense for our registered defined benefit plans and defined contribution type plans. In 2019, we expect contributions to the CAAT plan to be equivalent to the related expense.

In the 2018 Fall Economic Update, the Federal Government announced a new refundable tax credit to support labour costs for qualifying news organizations starting in 2019. It is possible that we may benefit from this program, however, there can be no certainty that the refundable tax credit will be enacted as proposed, or that we will be a qualifying news organization under the program.

DIVIDENDOn February 26, 2019 , Torstar declared a quarterly dividend of 2.5 cents per share on its Class A shares and Class B non-voting shares, payable on March 29, 2019 , to shareholders of record at the close of business on March 8, 2019 . Torstar advises that, for the purposes of the Income Tax Act, Canada and for any relevant provincial tax legislation, this dividend is designated as an eligible dividend.

ADDITIONAL INFORMATIONFor additional information, please refer to Torstar's audited consolidated financial statements for the year ended December 31, 2018 and the 2018 Management's Discussion and Analysis ("MD&A"). Both documents will be filed today on SEDAR and are available on Torstar's corporate website www.torstar.com.

CONFERENCE CALLTorstar has scheduled a conference call for February 27, 2019 at 8:15 a.m. to discuss its fourth quarter results. The dial-in number is 1-888-231-8191. A live broadcast of the conference call will be available over the internet on the Presentations, Events and Conference Calls page (Investor Relations) on Torstar's website www.torstar.com. A recording of the conference call will be available for 9 days at 1-855-859-2056 reservation number 9280336. An online archive of the broadcast will be available shortly after the completion of the call and will be accessible by visiting the Presentations, Events and Conference Calls (Investor Relations) page on Torstar's website www.torstar.com.

About Torstar CorporationTorstar Corporation is a broadly based media company listed on the Toronto Stock Exchange (TS.B). Its businesses include the Toronto Star, Canada's largest daily newspaper, six regional daily newspapers in Ontario including The Hamilton Spectator; English language StarMetro newspapers in several Canadian cities; more than 80 weekly community newspapers in Ontario ; flyer distribution services; and digital properties including thestar.com, wheels.ca, save.ca, toronto.com, a number of regional online sites, and eyeReturn Marketing Inc. Torstar also holds a majority interest in VerticalScope, a North American vertically-focused digital media company.

Non-IFRS measuresIn addition to operating profit, an additional IFRS measure, as presented in the consolidated statement of income, management uses segmented revenue, adjusted EBITDA (and where applicable segmented adjusted EBITDA), operating earnings (and where applicable segmented operating earnings), and adjusted earnings per share as measures to assess the consolidated performance and the performance of the reporting units and business segments. Please refer to Section 14 of Torstar's MD&A for the year ended December 31, 2018 for a reconciliation of adjusted EBITDA and Operating earnings (and Segmented adjusted EBITDA/Segmented Operating earnings – as applicable) with Operating profit (Segmented Operating profit – as applicable) and adjusted earnings per share to earnings per share.

Segmented revenueSegmented revenue is calculated in the same manner as operating revenue in the Consolidated Financial Statements, except that it is calculated using total segment results which includes our proportionately consolidated share of revenues from joint ventures and our 56% interest in VerticalScope. Management of each segment is accountable for the revenues, including the proportionately consolidated share of revenues from joint venture operations. Management believes that segmented revenue is a useful measure for investors as it is a measure of the revenues for which management of each segment is accountable. The intent of segmented revenue is to provide additional useful information to investors, analysts and readers of our financial statements. The measure does not have any standardized meaning under IFRS and accordingly may not be comparable to measures used by other companies.

Adjusted EBITDA /Segmented Adjusted EBITDAManagement believes that adjusted EBITDA is an important proxy for the amount of cash generated by our ongoing operations (or by a reporting unit or business segment) to generate liquidity to fund future capital needs and management uses this metric for this purpose. Adjusted EBITDA is not the actual cash provided by operating activities and is not a recognized measure of financial performance under IFRS. We calculate adjusted EBITDA as operating revenue, less salaries and benefits and other operating costs, as presented on the consolidated statement of income(loss), and exclude share based compensation, restructuring and other charges, and impairment of assets. Share based compensation is eliminated as it is a non-cash expense that fluctuates significantly from period to period, in particular for VerticalScope as a result of industry compensation practices. Restructuring and other charges and impairment of assets are eliminated as these activities are not related to ongoing operations as of the end of the period. The exclusion of impairment of assets also eliminates the non-cash impact. Adjusted EBITDA is also used by investors and analysts for valuation purposes. The intent of adjusted EBITDA is to provide additional useful information to investors, analysts and readers of our financial statements. The measure does not have any standardized meaning under IFRS and accordingly may not be comparable to measures used by other companies (including calculating EBITDA on an adjusted basis to exclude restructuring and other charges, share based compensation and impairment of assets). Segmented adjusted EBITDA is calculated in the same manner described above, except that it is calculated using total segment results including our proportionately consolidated results for joint ventures and our 56% interest in VerticalScope for which management is accountable.

Operating earnings (loss)/Segmented operating earnings (loss)Operating earnings (loss) is used by management to represent the results of ongoing operations inclusive of amortization and depreciation. Management uses operating earnings (loss) as a measure of the amount of income generated by our ongoing operations (or by a reporting unit or business segment) after giving effect to amortization and depreciation. Management believes this metric is also useful for investors for this purpose. We calculate operating earnings (loss) as operating revenue less salaries and benefits, other operating costs, share based compensation and amortization and depreciation. Operating earnings (loss) excludes restructuring and other charges and impairment of assets. Restructuring and other charges and impairment of assets are eliminated as these activities are not related to ongoing operations as of the end of the period. Our method of calculating operating earnings(loss) (including calculating operating earnings (loss) on an adjusted basis to exclude restructuring and other charges and impairment of assets) may differ from other companies and accordingly may not be comparable to measures used by other companies. The intent of operating earnings (loss) is to provide additional useful information to investors, analysts and readers of Torstar's financial statements. The measure does not have any standardized meaning under IFRS, is not a recognized measure of financial performance under IFRS, and accordingly may not be comparable to measures used by other companies. Segmented operating earnings (loss) is calculated in the same manner described above, except that it is calculated using total segment results including proportionately consolidated operating earnings (loss) for our joint ventures and our 56% interest in VerticalScope for which management is accountable.

Adjusted earnings (loss) per shareAdjusted earnings (loss) per share is used by management to represent the per share earnings (loss) of results of our ongoing operations (or by a reporting unit or business segment) and is not a recognized measure of financial performance under IFRS. Management believes this metric is also useful for investors for this purpose. We calculate adjusted earnings (loss) per share as earnings (loss) per share from continuing operations less the per share effect of restructuring and other charges, impairment of assets, non-cash foreign exchange, other income (expense) and change in deferred taxes. Restructuring and other charges and impairment of assets are eliminated as these activities are not related to ongoing operations as of the end of the period. Non-cash foreign exchange, other income (expense) and changes in deferred taxes are eliminated as these are not related to ongoing operating activities. The intent of presenting adjusted earnings (loss) per share is to provide additional useful information to investors, analysts and readers of our financial statements. Our method of calculating adjusted earnings (loss) per share may differ from other companies and accordingly may not be comparable to measures used by other companies. The measure does not have any standardized meaning under IFRS, is not a recognized measure of financial performance under IFRS, and accordingly may not be comparable to measures used by other companies.

Operating profit (loss)/Segmented operating profit (loss)Operating profit (loss) is an additional IFRS measure. Management uses operating profit (loss) to measure the results of operations inclusive of impairments and restructuring and other charges. Operating profit (loss) appears in our consolidated statement of income (loss). Management believes that operating profit (loss) provides additional useful information to investors, analysts and readers of our financial statements. The measure does not have any standardized meaning under IFRS and accordingly may not be comparable to measures used by other companies. Our method of calculating operating profit (loss) may differ from other companies and accordingly may not be comparable to measures used by other companies. Segmented operating profit (loss) is calculated in the same manner described above, except that it is calculated using total segment results including proportionately consolidated results for our joint ventures and our 56% interest in VerticalScope for which management is accountable.

Forward-looking statementsCertain statements in this press release and in Torstar's oral and written public communications may constitute forward-looking statements that reflect management's expectations regarding Torstar's future growth, financial performance and business prospects and opportunities as of the date of this press release. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as "anticipate", "believe", "plan", "forecast", "expect", "estimate", "assume", "predict", "intend", "would", "could", "if", "may" and similar expressions.

This press release includes, among others, forward-looking statements regarding expectations regarding our transformation efforts, including our efforts to obtain digital subscription revenue and grow digital advertising revenue, add value to our audiences and collect and use data, and enhance our digital advertising capabilities, expectations related to the merger of our defined benefit pension plans with the CAAT jointly sponsored defined benefit pension plan (including the expected benefits of the transaction, the anticipated obtaining and timing of regulatory consent, expected funding and expenses for registered defined benefit obligations and contributions to the CAAT plan), estimates and expectations relating to the expected net proceeds from the Workopolis transaction, expectations regarding Torstar's financial position and earnings, anticipated growth at VerticalScope, anticipated revenue trends and achievement of transformation initiatives, expected savings including savings from restructuring initiatives and other cost reductions, estimates and expectations relating to contingent liabilities and impairment of assets, Torstar's outlook for 2019, including anticipated revenue trends, anticipated growth and results at VerticalScope, anticipated effects of adopting the new IFRS 16 standard on lease accounting and its impact on adjusted EBITDA and cash flow, anticipated capital expenditures, the anticipated timing and amount of digital media tax credits, and potential benefits from the proposed new refundable tax credit to support labour costs for qualifying news organizations. All such statements are made pursuant to the "safe harbour" provisions of applicable Canadian securities legislation. These statements reflect current expectations of management regarding future events and operating performance, and speak only as of the date of this press release. In addition, forward-looking statements are provided for the purpose of providing information about management's current expectations and plans relating to the future. Readers are cautioned that reliance on such information may not be appropriate for other purposes.

By their very nature, forward-looking statements require management to make assumptions and are subject to inherent risks and uncertainties. There is a significant risk that predictions, forecasts, conclusions or projections will not prove to be accurate, that management's assumptions may not be accurate and that actual results, performance or achievements may differ significantly from such predictions, forecasts, conclusions or projections expressed or implied by such forward-looking statements. We caution readers not to place undue reliance on the forward-looking statements in this press release as a number of factors could cause actual future results, conditions, actions or events to differ materially from the targets, outlooks, expectations, goals, estimates or intentions expressed in the forward-looking statements.

These factors include, but are not limited to: Torstar's ability to operate in highly competitive and changing industries; Torstar's ability to compete with digital media, other newspapers and other forms of media; Torstar's ability to respond to the shift to digital media and the shift by advertisers to other digital platforms; Torstar's ability to attract, grow and retain its digital audience and profitably develop its digital platforms; Torstar's ability to charge for news content used by search, social media and technology companies; Torstar's ability to attract and retain advertisers and customers; Torstar's ability to maintain adequate circulation/subscription levels; Torstar's ability to attract and retain readers and traffic; Torstar's ability to integrate the technology associated with new digital platforms; general economic conditions and customer prospects in the principal markets in which Torstar operates; Torstar's ability to reduce costs; loss of reputation; dependence on third party suppliers and service providers; reliance on technology and information systems; cybersecurity, data protection and risks of security breaches; Torstar's ability to execute appropriate strategic growth initiatives including acquisitions; unexpected costs or liabilities related to acquisitions and dispositions; investments in other businesses; changes in employee future benefit obligations; reliance on printing operations; labour disruptions; newsprint costs; distribution costs; privacy, anti-spam, competition, communications, e-commerce, data use and environmental laws, health and safety regulations and other laws and regulations applicable generally to Torstar's businesses, and any related regulatory proceedings; litigation; foreign exchange fluctuations and foreign operations; dependence on and competition for key personnel; availability of insurance; intellectual property rights and other content risks; income tax and other taxes; credit risk; availability of capital and restrictions imposed by credit facilities; dividend policy; controls over financial reporting, results of impairment tests and uncertainties associated with critical accounting estimates; holding company structure; and control of Torstar by the Voting Trust.

Torstar cautions that the foregoing list is not exhaustive of all possible factors, as other factors could adversely affect our results.

In addition, a number of assumptions, including those assumptions specifically identified throughout this press release, were applied in making the forward-looking statements set forth in this press release. Some of the key assumptions include, without limitation, assumptions regarding the performance of the North American economies; tax laws; continued availability of printing operations; availability of financing on appropriate terms; exchange rates; market conditions and competition; rates of return and discount rates relating to pension expense and pension plan obligations; discount rates and tends in health care costs relating to post employment benefits; expected future revenues; expected future liabilities; expected future cash flows and discount rates relating to valuation of intangible assets; successful development and launch of strategic initiatives and new products; and expected benefits from the transaction with CAAT. There is a risk that some or all of these assumptions may prove to be incorrect. There is no assurance regarding the amount and timing of future dividends. When relying on our forward-looking statements to make decisions with respect to Torstar and its securities, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Torstar does not intend, and disclaims any obligation, to update any forward-looking statements, whether written or oral, or whether as a result of new information or otherwise, except as may be required by law.

For more information, please see the discussion of risks affecting Torstar and its businesses in Torstar's 2018 Management's Discussion & Analysis which has been filed on www.sedar.com and is available on Torstar's corporate website www.torstar.com.